President Obama has nominated Ernest Moniz, a professor at the Massachusetts Institute of Technology, as secretary of the Department of Energy, and Environmental Protection Agency official Gina McCarthy as EPA administrator. The American Petroleum Institute welcomed the choices, while the Petroleum Marketers Association of America’s president, Dan Gilligan, said the nominees seemed ‘practical,” and appeared to indicate a recognition on the part of the Obama administration that it needed soften its opposition to fossil fuels.
As competing forms of energy jockey for position, a boom in domestic drilling for both natural gas and oil is changing energy choices in the U.S. The New England Fuel Institute’s public policy agenda for 2013 calls on state and federal governments ‘to embrace policies that promote an ‘all-of-the-above’ approach to energy and that encourage market competition and consumer choice. Government policies should work for all industries ‘ not against any one.”
Here is more on what API, NEFI and PMAA said they would be lobbying for in the Obama administration’s second-term energy policies.
API: ‘A game-changing opportunity in the energy sector’
‘We hope the new heads of both agencies will encourage policies that help facilitate what our industry is doing to produce and refine the fuels ‘ heating oil, other refined products and natural gas ‘ that our nation will continue to heavily depend on for the rest of this administration and for many administrations after,” said Bill Bush, a spokesman for the American Petroleum Institute (API). ‘Industry is ready to provide this energy, but it needs a policy framework of reasonable access, fair tax policy and sensible regulations to have the best chance of getting the job done.”
API President and CEO Jack Gerard said the president’s choices were ‘critical.”
Talking to reporters after the nominations were announced, Gerard said, ‘The new Cabinet appointments will have a major impact on the game-changing opportunity in the energy sector underway. Gains in oil and natural gas production will create thousands of new jobs, and help spur economic growth for a generation. Increased production in the oil and natural gas upstream and midstream sectors alone could create more than three hundred thousand jobs.”
Innovations in hydraulic fracturing and horizontal drilling have unlocked both natural gas and oil from shale formations in quantities ‘that would have been unimaginable just a few short years ago,” Gerard said.
‘To give you an idea of the scope of this new found abundance, the National Petroleum Council, just a decade ago, estimated total remaining natural gas resources in the contiguous 48 states at just over 1,100 Tcf, or about 45 years at current consumption rates,” Gerard said. ‘Last year, the firm ICF International estimated total remaining natural gas resource at over 3,500 Tcf, which equates to more than 140 years of our consumption.
‘Nearly the entire rise was from increased resource estimates from shale and other tight formations,” Gerard said. ‘And by the way, the 3,500 Tcf figure is conservative. It assumes current technology and only includes currently identified formations today. And, there are other studies that show even more supply.”
The ICF study also projected that these new technologies could lead to an increase of six Tcf per year of natural gas production by 2017, a volume that is more than twice the natural gas consumption of California, Gerard said. ‘The study also showed that by 2017, we could increase our production of oil and other petroleum liquids by 630 million barrels per year,” Gerard said. ‘That is more than the current production in the Gulf of Mexico.
‘These gains in oil and natural gas production will create thousands of new jobs, and help spur economic growth for a generation,” Gerard said. Estimates of GDP increases range from $167 to $245 billion in 2017, which is equal to 1.2 to almost 2 percent of current U.S. GDP, Gerard said.
Gerard cited as a problem ‘the stark difference” between the rate of new energy development on private and state lands versus federal land.
‘So far, most of the shale energy revolution has occurred on private and state-controlled, not federal land where almost 90 percent is off limits,” Gerard said.
Citing statistics from the Department of the Interior, Gerard said that from 2008 to 2011, both the number of drilling permits issued and the number of wells drilled on federally-controlled onshore land dropped over 35 percent. Though 2012 data aren’t available, Gerard said, ‘There’s very little reason to believe those numbers won’t continue to decline. That must change if we are to fully realize our energy potential.”
API is a national trade association that represents the U.S. oil and natural gas industry. It has more than 550 members, including large integrated companies, exploration and production, refining, marketing, pipeline, and marine businesses, and service and supply firms.
NEFI: An ‘all-of-the-above’ approach to energy
The New England Fuel Institute (NEFI) advocates for mostly small business members ‘ dealers in the heating oil industry.
New oil exploration and recovery technologies, progress in the areas of energy conservation and efficiency, and ongoing investments in alternatives such as biodiesel, lead experts to believe the U.S. has the potential to be completely energy independent within a decade, NEFI said in its 2013 National Public Policy Agenda. But more must be done to unleash the full potential of American-made energy and bring stable and affordable energy to consumers, NEFI said.
Among many steps, it urged the following: maximize domestic energy production; invest in energy efficiency, conservation and renewables; promote market stability and confidence; and implement reforms under the Dodd-Frank Act.
The U.S. is producing more oil today than at any point in the last 15 years, NEFI said. ‘Yet, most of these gains are the result of shale oil and tight oil production on private land,” the institute said in its public policy agenda. Here is more from the agenda:
‘To realize our full potential, Congress and the administration must remove barriers to energy production on public lands and waterways. Policymakers must also lift restrictions on sea-borne vessels and permit the construction of new pipelines necessary to transport low-cost North American crude oil to refineries and on to U.S. consumers. NEFI therefore continues to urge the immediate approval of the long-delayed TransCanada Keystone XL pipeline.”
NEFI said its industry is a leader in energy efficiency and conservation, but average per-home heating oil use has dropped by more than 40 percent in recent decades. The institute states in its agenda:
‘We are now embracing a low-sulfur (15ppm) and, as a result, cleaner-burning fuel that will reduce carbon emissions, improve system performance, and allow the introduction of ultra-efficient heating technologies and provide even greater consumer savings. Furthermore, blending renewable fuels into heating oil could displace over 800 million gallons per year of petroleum. Overall emissions from this low-sulfur, bio-blended and more efficient fuel rival those of natural gas. In order to make further gains, Congress should renew the National Oilheat Research Alliance (NORA) program, strengthen tax incentives for the installation of efficient home heating appliances and preserve the biodiesel tax credit and Renewable Fuel Standard (RFS).
PMAA: Obama administration should recognize primacy of fossil fuels
The energy options of the U.S. have altered now that hydraulic fracturing, or ‘fracking,” for natural gas has also resulted in the discovery of unexpected domestic reserves of crude oil, noted Dan Gilligan, the president of PMAA. ‘We’ve had it beat into our heads forever that the U.S. is an energy poor country, dependent on the rest of the world,” Gilligan said. Now, he said, ‘We’re finding out we’re pretty energy rich.”
Of the boom in domestic production of natural gas and crude, Gilligan said, ‘It’s the greatest opportunity to grow our economy. I think that the Obama administration has already recognized it’s going to have to be more tolerant of fossil fuel growth in the U.S.”
The president’s nominations for Energy Secretary and head of the EPA appear to reflect that, Gilligan said.
‘In the case of Gina McCarthy, our New England marketers are sending letters in on her behalf,” Gilligan said. McCarthy was the head of the EPA in Connecticut. ‘They felt she was a very practical person to work with,” Gilligan said. ‘They always thought she was accessible. She was always willing to sit down and listen. They didn’t always agree with what her ultimate decision was, but they felt she was approachable and practical, and not the rigid ideologue that sometimes shows up at EPA.”
While acknowledging that McCarthy would set the tone as the head of the EPA, Gilligan did not anticipate that PMAA would have much in the way of direct dealings with her. ‘We always meet in the office of the air quality chief or the water quality chief,” Gilligan said, where the subject is SPCC (Spill Prevention, Control and Countermeasure).
As for Moniz, Gilligan said, ‘Our members up in New England that have dealt with Moniz say he’s a very practical person. He believes that nuclear is going to play a significant role, and that this new-found natural gas and oil is a good thing.”
Gilligan said, ‘I think with these appointments we are seeing Obama show a shift to the practical side of things. They were in campaign mode the last couple years and they had to be very aggressive to keep the environmental groups on the team and working hard for Obama’s reelection. I think now that he’s re-elected he has to think about governing. He can’t pursue things strictly from an ideological standpoint because that will never get anything done. I think we’ll see more focus on what’s practical – what can practically be done.”
The Green View
An environmental group, the Sierra Club, welcomed the nomination of Gina McCarthy as administrator of the Environmental Protection Agency (EPA). Sierra Club Executive Director Michael Brune said in a statement that McCarthy ‘has a strong record of protecting the health and safety of millions of Americans by limiting dangerous pollution in our air and supporting programs that help get America’s kids outside.
‘As head of the EPA’s clean air division, Assistant Administrator McCarthy forged bipartisan coalitions to finalize strong clean air safeguards and historic fuel efficiency standards, and as Commissioner of the Connecticut Department of Environmental Protection, she led the state’s ‘No Child Left Inside’ campaign,” Brune said.
About Ernest Moniz, the nominee for Energy Secretary, the Sierra Club said, ‘We urge Mr. Moniz to prioritize clean, renewable energy as climate solutions over destructive fossil fuels and boondoggles like liquefied natural gas exports.
‘We would stress to Mr. Moniz that an ‘all of the above’ energy policy only means ‘more of the same,’ and we urge him to leave dangerous nuclear energy and toxic fracking behind while focusing on safe, clean energy sources like wind and solar.”